Posted
by
Hemos
on Wednesday January 12, 2000 @08:47AM
from the drawn-and-quartered dept.

Quite a number of people have written to us with news that's been seen on CNN regarding the MSFT anti-trust trial. Apparently, government prosecutors are considering breaking the company into three parts - it's expected that MS will appeal the ruling. The parts would be (probably) a Windows OS division, a software division, and perhaps an Internet-business division.Update: 01/12 04:53 by H:We've heard now that the DOJ denies the report - or at least parts of it, saying that it's incorrect in several "aspects".

I would imagine that stock would have to be spread, i.e. that one person wouldn't be able to control all three companies.

I have to say, I think it would be a good thing, both for use in the OSS world, but also for Microsoft - I think MS would love to have the handcuffs taken off and allowed to compete freely (i.e. Office for Linux, etc.)...

While the DOJ is of course correct in proposing a breakup (as a direct result of finding Microsoft guilty of monopolysing the market), I wonder whether this will help control MS' influence in any way.

While having seperate divisions for OS and application software will (hopefully) hamper their attempts to integrate the lot, 90% of the world's PC will still run on Windows. 99% of the world's managers will still choose to use Windows software and Microsoft applications because it is still the de facto standard. Breaking up the company doesn't help here at all.

Besides, look at what happened with the AT&T breakup. The seperate companies each went ahead to become market leaders in their own segment. It was hardly of any benefit to AT&T's direct competitors.

In short: I'm not getting up my hopes that this will seriously threaten MS's dominant position on the global market.

Well, some people feel that their consumer OS offering, Windows '98 is probably close to a loss leader. At the very least it doesn't have the same margin as their application packages like Office. Three separate company would need to be profitable on their own. So that could mean no more sub $100 OS packages and no free browsers.

The problem is, this still leaves one company with a monopoly on OSs, one with a monopoly on office software, and so on. What's the point of replacing one monopoly with three? (or two - the OS one and the Office one) What's really needed is a breakup into three or four essentially identical companies that can actually sell and develop their stuff in competition - we need competition _within_ the windows market itself, both the OS and the major applications. If they go the breakup route (which might not be ideal - opening the APIs and standardising them, and maybe the windows source so that other companies can produce competing but compatible version, would probably be better in the long run) then they have to target the breakup at competition, not at some nice convenient points of demarkation(sp?) within the company.

To recap, the basic problem is one of replacing a broad software monopoly with several narrower ones - the monopoly isn't destroyed, it's just reconstituted.

applications from the other applications in this day and age? Altogether too many applications need access to the internet.

And does this mean that no company can produce an Operating System, Applications, and Internet Software? Or are the reminants of MS to be forever cursed, and handicapped in competition against other companies in this arena?

Breaking up a cancerous growth is worse than simply removing the problem. What's worse than One Microsoft? Three of them competing for World Domination. If those who lost their jobs due to anticompete practices were compensated, I'm sure justice would be served.

IANAAL (I am not an American lawyer), but presumably part of the deal would include limitations as to who could own stock in the companies. There is (was?) a UK concept called the 'Golden Share', in which no-one could own more than 15% of any one company.

The court might, for example, demand that no one shareholder could, directly or indirectly, hold more than 20% of more than one company. So Bill could keep the Windows company, but would be limited as to what he could own in Microsoft Applications.

There might also be 'collusion' conditions limiting the ability of the baby Bills to enter into secret contracts.

I suspect that if Microsoft was forcibly split up, it would be along the lines defined by the DOJ when they brought the case. So since part of the case was against illegal tying, then IE and Windows would be forcibly seperated. The applications market, which was not part of the case, would be a third company.

The Applications group would be the one most likely to keep the Microsoft name, since Windows is as well known a name as Microsoft, and for all its future importance, the Internet group is not the cash cow that Office is.

I also think that Hardware could do very well out of this. I get the impression that Microsoft hardware is largely used to launch new hardware initiatives that other companies take up (mice wheels, Windows keys, joystick improvements). It has the style, the imagination and the quality to go a lot further when it is freed from the politics.

It would make a very plausible fourth company, but that won't happen unless Microsoft wants it to.-- James Wilkinson

IMHO MS Hardware is the only spinoff that I would buy stock in. They actually still produce reasonably good stuff that does not break the second you get it out of the box.

Other that that I think that the DOJ is going to have a nearly impossible time seperating IE from windows. I think we'll see a MSOS, MSAPP, and MSNET for sure, and I hope we see a MSHW or MSLABS (like the old bell labs)

Well, the judge already declared in the FoF that browsers are separate from operating systems, so I would imagine that if this breakup went through IE could no longer be an "integrated" part of Windows (yay!). I don't imagine that there would be any problem though if the OS division licensed IE from the app division for distribution with Windows as long as it is included as an optional, add / removable component like Hyper Terminal or WordPad - this is really how it should have been from day one in my opinion. This would be a great benefit to consumers as they would for once have a true choice as to which browser(s) are or are not installed on their computers.

M$ did a re-org last year. How does this news relate to the lines they had already drawn for themselves? Will it be along the lines that M$ has already set internally? This would make me believe that M$ felt this was a likely outcome and was preparing it as a contingency.

You have a good point, but the resulting monopolies from such a breakup, while still monopolies, would have far less ability to leverage their advantage. For example, the insider information that the applications group currently (presumably) enjoys would be gone in this scenario. Further, the marketing leverage the applications group used against Netscape would not have been possible had they not been the same company that made the operating system. (ooops! I forgot -- IE is part of the OS. *slaps forehead*)

I've seen a bunch of posts claiming that even if MS is broken up into these three separate companies, they will each still have a monopoly in their own market space.

That's not the point. Monopolies aren't illegal. MS broke the law by unfairly using its monopoly power, not by having one. If OS, apps, and internet are all separate companies, they can't join together and force new products down our throats while preventing the competition from entering the market.

The one thing I've been wondering all through this trial is, how can it be possible for a free man in a free country to be disowned by the state (except for taxes) ?

If MS is indeed split up, it will have either no consequences, as Bill Gates still holds the majority of shares (and rightfully so, since he owns the majority of MS currently), or the state will have to restrict Mr. Gates rights to his fortune, which is what happened during various communist revolutions, or the state will have to buy out Mr. Gates, which is propably the best thing that could ever happen to Mr. Gates, since all his wealth is currently paper money depending on the stock price of MSFT, but when he gets bought out, he will have "real" money (real as far as these green paper things can be...).

If you take a look back at other famous split ups, neither of them worked in the past. Neither the IG Farben split up in Germany (into Hoechst, BASF and Bayer) weakened the IG Farben (they all are now bigger players), nor the Seven Sisters split up of Oil worked.

IMO, the split up will not change the world of software in any way, since Bill Gates (and the other people who hold the stock in MSFT) will see that the BabyBills work together.

The reason that MS has a monopoly in the two(three?) areas is because of each other. With software, the worst thing you can have is one company owning the software and the operating system. Of course this only applies to close sourced systems. The reason is that the makers of an application that also owns the OS has an advantage of: 1. seeing how the OS works, and 2. having the OS optimized for the apps.

Breaking up the OS from the apps helps others to compete. This way the OS won't be playing favorites to the apps that the OS company owns. Also this helps other OS's to compete, since there will no longer be a marriage between apps and a particular OS.

AT&T break up was done the way you say. The goverment turned one big monopoly into several little ones, that eventually became big again. This was because the users didn't have a choice in what company they delt with. I went from only a AT&T choice to an only Bell Atlantic choice. Smaller monopoly but still a monopoly.

This break up IMO will stop the MS monopoly. It will force them to compete fairly. Of course a break up of the Apps might help as well, since an integrated Office can spread too, but that is going a little too extreme. Even for Microsoft.

To recap, If we break up horizontally, then one of the OS/apps can become the dominant one and we will be in trouble again.

Good points. Personally, I wish the Government would keep its sticky fingers out of Big Buiness...at least when it gets this far along. The government should have done something back in the Win3.1 days, when it was obvious something was going on. If they had ruled earler on the Caldera/MSFt/Dr.DOS/Win95 thing, maybe Microsoft would'nt be as greedy and bullheaded.

Anything the government does to regulate buisness in this fashion never works. Rather than the forced breakup of monopolies, how about passing some good legeslation that prevents this consolodation of power?

The internet is just a big network. So at the OS level you support networking. You provide the basic functions such as a TCP stack that everything else builds on. It's hard to argue that a TCP/IP stack shouldn't be part of the OS. A browser, which is just a data formatting tool when you get right down to it, is a completely different story.

What this means is that Microsoft OS company builds in the basic network functions. They then publish the spec, and the other Microsoft companies build applications based on the spec. So this isn't about to prevent applications from accessing the internet.

A lot of internet applications build on common standards to intercommunicate. I fail to see how opening the system up to competition in this space is bad.

A company that controls Windows or Office is hardly handicapped. A lot of software companies do just fine without entering the operating system space. The software space is a big, big area. Being restricted from one or two classes of software isn't a fatal blow. It's more a slap to get them to go out and actually be innovative, rather that just making applications with more annoying features.

The problem is, this still leaves one company with a monopoly on OSs, one with a monopoly on office software, and so on. What's the point of replacing one monopoly with three? (or two - the OS one and the Office one) What's really needed is a breakup into three or four essentially identical companies that can actually sell and develop their stuff in competition - we need competition _within_ the windows market itself, both the OS and the major applications. If they go the breakup route (which might not be ideal - opening the APIs and standardising them, and maybe the windows source so that other companies can produce competing but compatible version, would probably be better in the long run) then they have to target the breakup at competition, not at some nice convenient points of demarkation(sp?) within the company.

To recap, the basic problem is one of replacing a broad software monopoly with several narrower ones - the monopoly isn't destroyed, it's just reconstituted.

The trial wasn't about MS being having a monopoly because they are the market leader. It was about MS using their market dominance to lock out competitors. It was about making people who offer Windows offer Office to. This is what the trial was about, and this is what the ruling is meant to fix.

Being a monopoly isn't about being on the most systems, or being the de facto standard, it's about keeping your competitors from even having a chance in the market, and that is what this is meant to fix.

Any solution that fails to address pre-loads is doomed to fail, or to make things even worse.

And until hardware vendors start shipping drivers for alternative PC OS's with their products, and until software vendors start releasing alternative PC versions, no real change will take place.

The zero-choice pre-load is, I think, the causative factor of the other two--if computers start appearing in stores and on web sites pre-loaded with something besides MS-Windows, then vendors will start addressing those other choices.

I'll repeat my solution, which I've posted here before. Unfortunately, it involves doing very little to Microsoft; fortunately, it doesn't single anyone out for special punishment:

Require all system vendors to offer a minimum of two choices of preloaded OS, if they offer any preloads at all. The different OS preloads must be on equal terms--same level of support, same hardware supported, and so on. Only the price difference in the base OS can be passed along.

Require all hardware that comes with specialized drivers to provide drivers for a minimum of two OS's. As an alternative, they could publish complete specifications of their device's interface. Any provided drivers must provide equivalent functionality.

Require all software that communicates with other software (like over a network) to be accompanied by complete and accurate specifications of the protocols and formats involved in that communication.

Require all software that saves data in files to be accompanied by a complete and accurate description of the formats of those files.

The trouble we're having with Microsoft is only a symptom of a larger problem. If not them, then somebody else would be doing it. If they are only broken up, the problem will continue.

What about the Microsoft Press? During the break-up attempt of '95 this was certainly going to be one of the Baby Bills. Now which division is going to get free access to the MS publications? And what about MSNBC?

if anything, a meaningful breakup with real 'firewalls' between os and app developerss (such that non M$ app developers have as much access to os secrets as M$ developers when attempting to compete on the say os playing field, ala Netscape) would add admin costs, that plus the recent temp appeal and Caldera settlement etc means that either the per cpu license costs will go up, or stock dividends will go down; either way it'll be less attractive all around and people may stop being M$ robots and falling for their whitewashed crap, and maybe consider products that are more than a bunch of barely fulfilled & not-quite-working-right marketing bullets on the full page ads.

I agree. With the company for the OS being seperate to the other(s) incompatability between different software and different OS systems becomes inviable and the software groups will release versions of their programs for Linux while the OS system suddenly finds it has to stay competitive without the software tie-ins and will either improve in areas thus far neglected such as reliability, or founder.

...in my opinion. Each new company would necessarily be focused on maximizing value to the stakeholders.

- The 'applications' company would have significant incentive to port it's stuff to alternate OS's. Suddenly, there's MS-Office available for Linux, FreeBSD, BeOS -- gosh, maybe even my old CP/M-80 box.

- An OS cannot stand for long in the marketplace without application software. With the applications company producing software for alternate OS's, investing in them becomes less risky for the consumer. With intense competition from cheap or free OS's, the new OS company would have to start providing real value to survive.

- Both companies would suddenly have *real* competition -- not the pretend competition they alleged during the anti-trust proceedings -- and they will suddenly be forced to be truly innovative, not immitative.

Consider MS' historical behavior: They seek to dominate any market they enter. They were able to do it with Windoze because they controlled the desktop and what appeared on it. After a breakup, I'd still expect the new companies to operate under the same premise. Only this time, it's a level playing field: the applications company doesn't own the playing field, and the OS company doesn't own the ball.

Frankly, I don't want Microsoft to be broken into multiple companies because I don't see that accomplishing the main goal: Allowing competitors to interoperate with Microsoft products. We want well-documented API's and file formats.

Three companies can be just as non-cooperative as one company. Unless the DoJ is hoping that this threat will scare Microsoft into cutting them a deal.

Contrary to popular belief, the reason MS is in trouble with the DOJ is *not* for being a monopolist. It is not illegal to be a monopoly! There's nothing wrong with being a monopoly, as long as you obtained it using legal business practices, and don't try to use your first monopoly to create others.

The threatening part of Microsoft is not their OS is on 95% of the computers, but that the monopoly gives them the power to to force their applications software onto those platforms as well, turning the OS monopoly into little monopolies over every other facit of the software market. Why would most people by an office suite, when a pretty good one came "free" on their computer when they bought it? The OS monopoly has given them others powers as well, such as total control over what hardware manufacturers can bundle with the computer. (In the past they required the hardware companies to not ship competing software, and there's no reason to believe as soon as the DOJ goes away they would continue that practice.)

There are many other illegal things MS can continue to do as a single company that would all be controlled simply by breaking them up. The advantages are many:

Each separate company would retain it's own intellectual property. Linux advocacy aside, there is no viable solution that would rob a company of it's intellectual property. There is no way in hell any government is going to throw out hundreds of years of precedent simply because of the open source movement.

Much less oversight of the broken up companies is needed. Any behavior based solution (we promise never to screw anyone over again) would require close up monitoring of the behavior, and they would in the end simply do whatever they wanted and hope for a better deail at the next trial.

Each separate company would act in its own interest, which acts to prevent monopolistic behavior. For example, an operating system company could no longer offer deep discounts to the hardware vendors who also shipped Office, since office would be sold by the applications company. An operating system company could no longer threaten to cut off a hardware vendor who bundled non-MS applications. A separate internet/services/ISP could no longer have a reason to pay all of the ISPs hundreds of dollars every time the ISP converted to using an MS application.

It should be noted that when Bell was one company they broke them up into the baby bells they had 3 parts too: One that handled selling phones, one that handled long distance, and one that handled local calls. Wait, that's not what they did, because that wouldn't have helped. To me this cure is worse than the disease. If this decision is ever implemented we may have to go through the same whole expencive deal again in a few years when they figure out that it didn't work as planned.

A horrible thought: If AOL becomes as big as it wishes to with the Time Warner deal . . . what would happen if they bought one of the three companies?

The following gets mentioned allot but I'll toss it on anyway as well. If I were M$ I'd just up and threaten move to Canada or somewhere that wants the piles of tax dollars and well paid workers they create.

I'm not at all convinced. How exactly does this interfere with their market power?

If a customer buys Office from MSB, what do you think the chances are that they will also buy Windows from MSA? Right now, exactly 100%. The converse isn't quite so certain, but nearly so.

It is only if MSB has a reason to port Office to other systems, and MSA supports third party applications with a stable and open API for Windows that competition will be encouraged. If MSA and MSB both view it as beneficial to remain interlocked, then the situation won't change much from present. Perhaps the DOJ is considering some behavioral language to prevent such collusion.

I see only mild advantages from this breakup. One, the cartel will be unstable compared to the monolith, threatening any one component financially might unlock it from the rest of MS. Second, forcing communication between the components of MS may force the API to be treated as a standard rather than a weapon against competitors. More of its details may leak or even be made open as well.

Thanks for the great information, AC. So let me get this straight, some unsuspecting inventor made the mistake of showing his "whell" mouse to MS, who acted all uninterested like it wasn't a great invention, then, as soon as this guy's out of Bill's office, they rush down the hall with their new found inspiration and create their own knock-off "whell" mouse. Incredible!

If it weren't for all the great links and supporting information that you provided, I wouldn't believe this story at all. I hope this hapless inventor has luck with his new gas pill.

AT&T splitting into AT&T, NCR & Lucent was almost 20 years after the original MFJ.

At the time of the MFJ, the primary supplier to AT&T & the Bells was the company which came to be Nortel. As Lucent & Nortel are most definatly in comptetition, it appears that the MFJ has increased competition.

Okay, a breakup might hamper Microsoft's attempts to use Windows as leverage to dominate new markets (like the Web)...but only if there's a mechanism put in place to prevent collusion between the newly created companies. Without some kind of preventation measures in place, the split would be ineffectual at best.

First of all, as stated above, Dividing M$ is like attacking various oozes and slimes in the D&D world, Physically attacking them only divides them further in which each part then becomes another formidible entity which you then have to fight.

Secondly, As I see constantly in my line of work (ISP) The masses still think that Microsoft is the only answer.. yeah there are quite a few mac-heads, and the occasional Linux user around, but given the "choice" more people are heading towards Microsoft.. Reason? PLACEMENT, I live in a rural area where most people do their "technological" shopping at Wal-mart/Ames/K-mart what have you, and are easily swayed by cheap costs and what the salespeople are pushing at them.. including computers that have shoddy parts (i.e. Rockwell HCF 56K modems with drivers in them from 8 months ago) and even less technical support.. But they don't look for that, they see the ads on TV showing sharks swimming from the screen and how it's going to raise your kids IQ from cro-magnon level to rival Stephan Hawking, then give my staff and I shit about how pages aren't loading quick enough at a 26.4 connection.

3. What about updating their shoddy code??? Does that mean that people are now going to have to even search THAT much harder to find updates to their MS products (see #2)

Don't get me wrong, I'm doing the dance of joy for the breakup of M$, I'm just a little leery (no not Denis) of what the future holds for us..... C'mon B.G. is so used to falling face first in feces and come up smiling and fresh as a daisy he makes the other Bill (Clinton) pale in comparison.

Whether they're the same company or not isn't the point, they will be banned from communicating with each other no matter what Bill orders from on high. It's called a Chinese Wall (read about half way down this [pbs.org] page to see what I mean) Basically, this means everyone gets to see the same API ('cos IE and OS teams aren't allowed to communicate), no optimizations for each other etc.

Not true. AOL may be big, but they don't own 90% of all the Internet customers out there. I don't have to go through them to get to more than 50% of the people on the Internet, unless I explicitly want to get to their particular customers.

Likewise, Time Warner may own a lot of content, but they don't own 90% of all content out there and I don't have to go through them in order to get content, unless I want their particular content.

These kinds of things cannot be said of Microsoft -- If I want to get to more than 50% of the people out there using computers, I *MUST* go through them one way or the other.

I don't recall where I saw it, but the point was made that Microsoft is a horizontal roadblock that pretty much everyone has to go through, whereas AOL/Time Warner is a vertical integration (or roadblock) that only affects people wanting to go a particular path.

If MS is indeed split up, it will have either no consequences, as Bill Gates still holds the majority of shares (and rightfully so, since he owns the majority of MS currently), or the state will have to restrict Mr. Gates rights to his fortune, which is what happened during various communist revolutions, or the state will have to buy out Mr. Gates, which is propably the best thing that could ever happen to Mr. Gates, since all his wealth is currently paper money depending on the stock price of MSFT, but when he gets bought out, he will have "real" money (real as far as these green paper things can be...).

Those baby Bills will do what they have to to remain profitable. A lot of people believe that Bill Gates net worth will double, possibly triple with a break up.

That's of no real consequence. The companies will surely find it much more profitable to seek their own fortunes, with the Internet divison and the software division cut off from the cash cow of the OS division. The OS divison will have plenty of reasons to partner with other companies, not just the MS software divison.

The anti-trust action is not against Bill Gates and his personal fortune. He wasn't the one the suit listed. Microsoft is the culprit.

IMO, the split up will not change the world of software in any way, since Bill Gates (and the other people who hold the stock in MSFT) will see that the BabyBills work together.

Personally, I don't think that Bill Gates is that stupid. He has the second opportunity of a lifetime to be the worlds first Bazillionaire, and I don't think he's going to throw that opportunity away playing "business as usual" with the divided MS.

MS further demonstrated this point by porting IE to other, non MS OSes showing that the browser->OS dependence is bullshit (i.e. the OS is not an integral part of a browser).

The other dependency (the browser is an integral part of the OS) was disproved during the trial.

I hope the two will end up in different parts of the post-trial-microsofts. With the fake dependencies eliminated the two will be able to evolve seperately opening the way for making the browser dependencies standards compliant thus enabling to use any standards compliant browser rather than just internet explorer.

The integration of browser and OS on itself is quite a good idea. It's only the fact that MS decided to rely on their own standards rather than the W3C standards that bothers me.

I'll bet the "Apps" division has some (lots of) influence. It's one thing to see and understand what's there. It's quite another to drive the requirements.

This may very well be the case, but as separate companies, answering to separate stock holders, and physically separated from each other, the leverage between "divisions" disappears. They could sign secret pacts and they could have back-room meetings to keep the dream alive, but the DOJ will be watching for this.

Think of an anology: two best friends (male) are out one night and a beautiful, charming, intelligent woman approaches. Both men are interested in this woman and they both could sit politely and talk to her for the evening, but both have more in mind than just conversation. The two men politely suggest a threesome, but Miss Beautiful Charming Intelligent says, "No, thank you." Now the relationship between these two best friends is competitive. They can smile and shake hands in public, but at the end of the day, their relationship with this woman is at the exclusion of the other man.

Depending on how long Microsoft can strech out the appeals process. I could easily be nearing retirement age by the time any such breakup happens. Personally, I think that a breakup would be the worst of a bad set of options.

I think there's a good chance that the OS division would start branching out into other areas (like web browsers and servers - oh, they do that already) and start to use its OS monopoly to push competitors out of the market.

Second, forcing communication between the components of MS may force the API to be treated as a standard rather than a weapon against competitors. More of its details may leak or even be made open as well.

It would seem to me that this opening up of API's will encourage competition, even if not at the OS level. Ideally, of course, we would like to have OS competition at the level of Linux/freeBSD vs. Windows, for example. But it won't be bad to have an alternative Win32 implementation based on the opened API (WINE comes to mind).

IMHO this is more than merely a "mild" advantage. The opening up of the API's will cause (currently) MS products to lose the monopolistic edge of knowing the internal, "undocumented" API of Windows, thus opening up the market to fair competition. Perhaps more competitors to MS Office or IE. Remember, once IE is decoupled from Windows, "all hell breaks loose" (at least from M$'s point of view) -- we can *finally* have alternative browsers that actually stand a chance of competing with IE. At the very least, even if competitors don't attain to the same level of market saturation, this will still force IE to be pretty high-quality in order not to lose to its competition. Maybe people here prefer a totally non-Windows alternative to things, but you have to admit that opening up fair competition in this way is good for the market, whether or not things go the way we'd like it.

The only thing that can help the industry is open standards - Microsoft must be forced to publish all Network Protocols, file formats, and API's; and must be prohibited from making any agreements along the lines of per-processor licensing.

If this is done, Microsoft will still be free to innovate as much as they would like; and the only way to continue to dominate would be to create the best software.

Breaking one horizontal monopoly into 3 horizontal monopolies will change nothing... Windows, IE, and MS Office will still be the only game in town.

M$ got to their monopoly status perfectly legally. It's just the abuse of that monopoly *after* that which is causing the problems. I would certainly hope the Justice Dept would go after AOL/TW *if* they abuse their new-made monopoly. But they can't prevent companies from *becoming* monopolies.

From reading through most of the discussion so far, quite a few people have said that if this breakup were to occur, then MS would magically start porting stuff to linux.

My initial reactions to this were: 1) Why would they want to port products to another operating system when: a) they wouldn't release them for free b) they wouldn't release the source code

In my opinion, Microsoft was setup as a commercial entity, so they could make money (putting it very bluntly) - by doing what quite a few people here think would happen (open sourcing code, free for all MS products) would ruin what they have built up over the years.

I'm not saying that's a good thing or a bad thing. I'm not pro-MS or anti-MS, I choose to use MS products on a daily basis, in the same manner that I choose to use FreeBSD, NetBSD and some forms of Linux day to day.

If they are _forced_ to release code, then they snip bits out, make it look the same, to the rest of the world it looks the same, and has nfi about it at all.

I find it interesting following the recent vitriol surround privacy, freedom and the rights of people needing to be maintained under the state that people actually advocate the forcing of a private (well, shareholder owned anyway) company to be fragmented by the government. So freedom is only the right of certain circumstances. Anyway on another note entirely, this isn't really going to change anything. Short of appointing government senctioned overseers and managers the company will still be able to continue to develope integrated products to a centralised strategy with monopoly control over tehir areas. In fact it may even strenghten MS's control over those markets, as although there will be a splitting of capital they will still dominate and will be able to focus more clearly on their individual tasks. Creating 3 seperate pseudo-monopolies will still elave them with market share. The only real answer is promotion of alternatives and looking at why the previous competitors failed whilst MS was slowly gaining it's dominance and trying to not make the same mistakes. + monopoly regulation is a bit of a non starter in gereral, it's only real power is stopping mergers, although in the UK the MMC is one of the most useless organisations of it's kind...

I asked this question when Slashdot had the anti-trust lawyers on for an interview.

Here [slashdot.org] is the URL of the answers. Basically, they did not seem too worried this would happen.

Here is a snippet for those who don't want to return to the original article:

David Niemi responds: Breaking apart operating systems, apps, and online services (vertical divestiture) would do *a lot* of good. It is much easier to detect and prosecute price-fixing and collusion between separate companies than it is to detect internal conflicts of interest inside a single company. The different companies would then be required to separately reporting profit and loss to their shareholders, and it would be next to impossible for them to justify helping the other parts of the former Microsoft at their own expense (whereas today, that happens all the time).

Now, instead of one large company to oversee, we have three, slightly smaller companies. Each with a dominance in certain market. The government will have to work three times as hard simply to prevent collusion between the three companies, if such prevention is possible.

Failing in this, you've just given the Microsoft Companies (the baby bills) another weapon/smoke screen to fight lawsuits and anti-trust hearings. Basically each of the three baby bills can sit there and say, we have an exclusive licensing agreement to do such and such with this other baby bill. The only thing that'll change are some accounting practices. Departmental budgeting will simply be replaced by contracts, agreements, licensing, etc.

Microsoft OS corporation will simply produce the OS (and possibly the browser, as the product now seems pretty irrevocably tied into file management for the system). Now they'll have a good reason to charge more for their OS (we don't get subsidies from the other departments we used to have). Plus they'll be getting subsidies from the other baby bills for licensing agreements relevant to the OS API hooks, etc.

Microsoft Applications corporation will continue to produce the dominant apps for the Windows platform, as they have had access to the Windows API from Day 1. And can continue to have access to the API through licensing. Apps will become more expensive due to the "we're not subsidized by the other divisions" excuse as well.

Microsoft Online Business corporation will, possibly, be hurt by the breakup, though the lucrative contracts from MSN, MSNBC, and their various other online initiatives will probably keep them easily in the black, since a meatspace presence isn't required for them to stay profitable. Their main competition would be Time-Warner-AOL. Even still, with their close ties to the other baby bills, they can easily leverage themselves in the market.

Simply splitting the markets up doesn't necessarily change public perception. Microsoft will still be Microsoft.

Take a look at phone service. Many people still look at it as "from THE phone company", even though their bills are separate and itemized.

Personally, I'm in favor of them opening up their API's to review, even if it comes with a license barring duplication. Companies would be able to build better products, and Microsoft would benefit from people reviewing their code and possibly improving it. The customers would benefit from better products and a wider range of highly optimized products.

It is only if MSB has a reason to port Office to other systems, and MSA supports third party applications with a stable and open API for Windows that competition will be encouraged.

The breakup greatly increases the chances that both things will happen due to fiduciary responsability. Right now, MS as a whole maximises profits by keeping a vertical monopoly. The Mac versions don't really count since they used them as a bludgeon in dealing with Apple, and because for the most part, Mac users are dedicated to Mac and won't likely come to Wintel, and the same is true of Wintel users.

Under a breakup, MSB has a fiduciary responsability to do what's best for Office and not care what happens to Windows' market share. If they behave in any other way, they are open to a new round of DOJ vs. MSB. Since the next leading product (Wordperfect) runs on Linux...

By the same token, MSA now has a fiduciary responsability to make sure it's easy to write apps for Windows, and not to care about Office's market share. If they do anything but that, it will be obvious collusion, and once again, a new round with DOJ.

It is NOT by any stretch a complete solution. MSB would still keep file formats an ever changing deep dark secret to keep users on the upgrade treadmill. Businesses will still face the risk of lost data because old files can't be read by the new product (just try to load a really old spreadsheet sometime), and the product will still be crammed full of bugs and 'cute' talking office products.

The OS side of things looks a little brighter. The primary things that keep people using Windows are ease of use (click and drool), and the need to run Office for information interchange w/ other businesses. The first is more perception than reality, but the second is a real reason (more or less). A split will kill the second reason.

To make the remedy complete, DOJ will also have to do something about the per processor licensing and funny price structure to VARs. We'll have to wait and see if that is part of the plan.

Yea, but Engish is open source:)...Applying the microsoft model: You would have to use their closed translators to be able to understand and speak their language. And the Wordperfect translators would goof up and construe the meaning of anything more complex than, "See Dick and Jane play ball."

The file format is the reason for the lock on enterprise level of the Office Suite. Document sharing is key and if formats can only be read by one program then it locks in that program for everyone. Why don't people use Wordperfect or some other format for the whole company? Because of the automatic albeit handy hooks into the OS and other embeded application.

This would be a rather unfortunate occurance. Microsoft is definitely a problem, but I don't think this is the way to handle them. They are a member of the Dow Industrial Index, their OS still is THE mainstream OS, Microsoft Word still sets the standard among word processors, and don't forget, they consolidated most of the PC world with a standard, albeit not a perfect one, but a standard nonetheless. That said, I am not, nor will ever be a M$ loyalist, in case anyone is wondering:o). I grant you, breaking up the company into 3 parts will force the parts to compete more vigorously. Consider an alternative scenario, hypothetically. Penalize M$, severely, make them pay heavy calculated damages to Caldera, Sun, IBM (I don't know if they also sued, but where is OS/2?), Netscape/AOL (I know..Aol doesn't need the money), and who ever else they have harmed. I mean heavy fines, ongoing. They listed 'Linux' as a competing OS in legal documents. Fine, let them then support the competition, as IBM (a legal trust), already does. They should either heavily and monetarily support, (although not have any control whatsoever over) a few of the free, non-commercially funded Linux projects, like Slackware (my personal preference;o) or Debian (albeit VA Linux and Corel are throwing their weight behind it, its still a free project I believe), or, they can become distributors of their own distribution, and support it with resources similar to the support they give Windows (I know ppl. groan at M$ Linux, but why not? If you can't beat us, join us;o) Why Linux and not another OS, like a bsd, or Solaris? First of all, Linux is best positioned at this time and place, bsd's and solaris outstrip linux server side, while Linux rips them on the desktop. (Please, this is my subjective opinion, no lame flames, stay on topic) Secondly, M$ did list them as a competitor in some anti-trust document, I remember reading that on The Register [theregister.co.uk]. BeOS is also another 'competitor' that merits financial support from M$, being as the nature of an anti-trust suit stipulates that the offender has suppressed new technology through unfair market manipulation, BeOS and Linux qualify as new innovations worth M$ penalty funding. If they don't want to compete with anyone else, make them divide their resources and compete with themselves. I think that if they are allowed to remain one company, but are SEVERELY penalized, it would be a faster resolution, a fairer resolution (for this to work they would need to be monetarily penalized in the range of the billions of $$'s, because it is ill-begotten gain), and it would be better for our economy, as well as the worlds economy. I may not personally like them, but how will it help anything if they are penalized in such manner that would degrade their service to their other customers? Most of whom couldn't care less about software wars, but would be hurt anyway. I must admit, a breakup would be gratifying though. They need to be reborn, as AT&T, and IBM were, because there is alot of ideas and innovations on their side, even if they have been hiding it behind millions of lines of buggy code. Their office software is standard setting, their OS is still the most widely used. Even their 'contributions' to java, were eventually included into an open-source implementation of java whose name escapes me now. M$'s actions have harmed us all, we know that, DoJ knows that. But lets not do more damage to ourselves or others in penalizing them. A breakup will be fought by Microsoft in court, vigorously for years, providing much hoopla, instead of amicably settling this, by allowing them to remain whole, but cutting in on Uncle Bill's paycheck. I think both sides could begin to work on the basis of keeping them together, but seriously downsizing them, in what is already a historical case. I don't know if this idea will be popular, but I hope it'd be well received, and if I err, I hope it is to the side of mercy, not for their sake, but for the greater cosmopolitan good. P.S.: What OS ran your first PC? Mine was a TandyRL1000, but I didn't begin to learn anything really until I got a wintel machine at 9. Just a thought. P.P.S: Sorry about the long sentences, remember, the preamble to the constitution is one sentence as well;oP

And that would be illegal. This is precisely what the current case is about. A monopoly by itself is perfectly legal, but using the power that monopoly gives you to get an unfair advantage in other areas is not.

Not really. Each has to justify itself to its own stockholders. MS-OS giving exclusive access to MS-Apps can't be justified to the MS-OS stockholders. MS-Apps giving away IE to help sell MS-OS can't be justified to the MS-Apps stockholders.

Read the FoF. Most of the things that look like monopoly behavior are done without any financial reason except to protect the barrier to entry. They put AOL on the desktop, in direct competition with MSN, just so AOL would dump Netscape. They even paid off ISP contracts with Netscape to get the ISPs to stop using it and start using IE. Explain that a shareholder of the MS-Apps company:

"We're giving our product away and, in some cases, paying people to take it. We expect no revenue from this product at any time now or in the future. Fear not! Your losses will result in even larger gains for another company."

That works inside a single company, but why would anyone want to hold stock in an MS-Apps company that behaved this way? You could get all the profit by buying MS-OS and none of the expense by selling MS-Apps.

A Windows operating system monopoly would work closely with smaller vendors like Corel in order to drive down office prices so that they could compete with the free office suites on Linux. Hell, they might even help port those free suites.

An office suite monopoly would port to Linux in order to maximize profit by covering the widest possible range of operating systems.

A development tools monopoly would work to make tools that were multiplatform and compatible with the component, object and scripting models used by all of the office suites.

Three monopolies is indeed better than one because they would all *undermine each other* by treating their old partners as ordinary ISVs.

Don't get me wrong, I'm doing the dance of joy for the breakup of M$, I'm just a little leery (no not Denis) of what the future holds for us.....C'mon B.G. is so used to falling face first in feces and come up smiling and fresh as a daisy he makes the other Bill (Clinton) pale in comparison.

I think that's a wise observation. BG certainly does have a way of turning things around. BTW, I'm not sure how many of you guys have had the opportunity to take Win2k for a spin--Microsoft hasn't exactly been sitting on their hands when it comes to fixing their OS. Win2k is a decent improvement over NT, and a huge improvement over Win95/98. It still crashes plenty (probably due to the fact that I couldn't find a decent driver for my TNT2) but I think they've done a lot of work to keep themselves on the desktop for a couple more years.

In other words people, don't get too comfortable with the idea that Microsoft is only capable of producing crappy bloatware. When they have competition they seem to be able to escape this mode--at least for as long as it takes to kill the competition. Just a thought...

Well, the question is why wouldn't Microsoft want to be broken up? If they have the best desktop OS and the best desktop apps, why wouldn't their shareholders continue to enjoy monopoly profits under two or more companies?

The reason is that there is marketing synergy between the areas they have monopolies in. The desktop application and desktop OS monopolies reinforce each other.

This dual monopoly on the desktop strongly restricts innovation in the desktop to Microsoft sponsored initiatives. You can't compete in one area effectively, because lack of access in the other limits you. You growth in the desktop app market is limited by lack of access to secret APIS, secret marketing plans, support and so forth on the dominant OS. You cannot succeed in the desktop OS market unless you have access to the dominant apps. Only free software has the capability of breaking this catch-22 -- because it destroys the very concept of a market for software. Markets allocate scarce resources -- open source dispenses with scarcity. In the end, Microsoft's dual victory in these markets may prove Pyrrhic.

A breakup into OS and app enterprises may not only be the best solution for the market, but in the end the best solution for Microsoft, freeing people who want to create software for a "market" from the spectre of being crushed by a dual monopoly and renewing consumer choice.

While this "punishment" would certainly be salutory for the software market, I'm not sure it has much to do with remedying the specific illegal actions that Microsoft is alleged to have taken. For example, Microsoft embedded IE5 into windows to prevent netscape from becoming a competing "platform". It would still have incentive to do this if it were an OS only company. The distinction between "application" and "operating system" is somewhat arbitrary; naked kernels don't make an OS.

It's Larry Elison's idea. Rather than split them vertically across applications, which would still leave one company with a monopoly on Operating Systems, another with a near monopoly on Office Suites, and a 3rd with an ungodly amount of cash to fund it's failing internet ventures, Elison suggested splitting them horizontally, where we'd end up with several companies distributing Windows and Office in a vie for supremecy.

I think that would be the best scenario. Microsoft and their allies say that this would cause confusion by having many incompatible versions of WIndows and such, but in reality, the incompatible versions will go out of business rather quickly, unless they've introduced something so radical that it actually can not run 16-bit software anymore...

And as for the internet becoming so intertwined, etc... it wasn't this way a few years ago, and Microsofts motives for bundling IE were clearly not for the consumer but rather to squasch Netscape, but these days, web browsers should be included with operating systems. They don't need to be as deeply "integrated" as what MSFT has done, but the reality is that in the future, companies distributing OS'es will need to be able to include technologies with their OS that aren't necessarily parts of the OS themselves...

Office is a HUGE product. There's still tons of justification for them not developing a Linux version, namely, how many people will actually buy it.... A port would take at least a couple years, so if they started now, we'd see it in 2002 or so...

But the only way it would be viable even then is if people within Microsoft felt that Linux would grow a huge amount in that time... I doubt that mindset exists much anywhere within Microsoft. Therefore the justification against developing Apps for Linux would and could continue...

I don't think that this is what they are thinking. The idea is rather to level the playing field.

Since the application group will have the same documentation as everybody else regarding the OS API, no more secret hooks into the OS that make it impossible for a would-be competitor to write a decent office suite.

Similarly, it is now possible to develop a competing OS, since the only requirement is providing a fully functional API. This will be possible because the API would be fully documented.

Also, no more squashing a competing application by extending the OS to include the equivalent of their application.

Whether one thinks this is the best solution is largely a matter of taste, it seems. After reading about, discussing, and considering all of the options that were available, I'm inclined to believe that this is the best (as in, least among the list of evils) that could be hoped for.

Whatever the DoJ decides to do with Microsoft one thing that they will not be doing is penalizing them. Rather, all the actions that they take are supposed to restore competition rather than simply hurt Microsoft. That's why they can't just say, fine them $20 billion dollars.

About the only thing they could do is decide that Windows is an essential facility or whatever the name is, but even then, the government would have to pay Microsoft for the source...

And lastly, the Judge found that Microsoft competes unfairly and has a monopoly on OPERATING SYSTEMS. Last I looked, Office is not part of the OS... Therefore, I thinks it's highly unlikely that there will be much done in the front of taking IP out of the Apps division...

Others have already competently dealt with most of the issues you bring up, but I'd like to chime in with how the Microsoft breakup relates to IT managers.

The preponderance of M$ software in corporate America has about 80% to do with M$ ability to leverage the desktop and application API(s) to the detriment of every other competitor, and 20% to do with the ability to cut loss-leader deals in one area and then recoup the profit in another. It's called site licensing -- pay a somewhat exorbitant fee for the right to use a CD-ROM to install the same software throughout the company without threat of lawsuit. Buy 10,000 desktop licenses, and we'll cut you a good deal -- and throw in Outlook Express and IE X.X on every desktop!! Buy NT server licenses (which can be very expensive) and M$ throws in the II-S web/application server for free.

Okay, now divide M$ into three companies as previously described (A) Microsoft OS, (B) Microsoft Apps, and (C) Microsoft Internet. Here's what falls out of the instances previously mentioned:

Since e-mail is also an Internet app, Outlook, M$ Mail, or Exchange can't just be thrown in with the OS, because the Internet company has a fiduciary responsibility to maximize profits, not give away product.

Buy the site licences for the applications, but the profit can't be used to lower/underwrite the cost of the desktop software.

II-S is an Internet application, so it can no longer be bundled with WinNT server (which is an OS). Now II-S has to compete on a dollar for dollar basis with other web servers, including the Open Source ones -- that are free. But since company C (Internet) has to maximize profit, they can't just give it away any more. As a guess -- IIS $1500... Apache -- Free. Hmmmm....company finance guy, what do you think I should choose?

Almost done... drivers: Since drivers are part of the OS company, the specs have to be published under an Open API, so that the Applications group and the Internet group can take advantage of them. For example, if TWAIN32 is part of the OS, then the WinAPI that talks to Twain32 has to be fully open so that the app group folks can use it.

SQL Server: part of the Applications group. ODBC32: part of the OS. II-S: Internet. Each group has to produce it's best work (less bugs hidden by the API's), and in order to maximize profit, each group has to work with "outsider" companies to improve their products, rather than relying on the monopoly to enforce compliance.

I haven't thought this one through, but no more cheating on Java with proprietary WinAPI calls, right?

End result -- choosing M$ in the corporate environment just got alot more costly and harder to justify. Which will increase the speed of movement in the corporate world AWAY from Microsoft.

Next thoughts... "90% of the world's PC will still run on Windows..."Take away the ability to cut deals by using the profit from M$-Office to underwrite the cost of the OS. Also, take away the ability to enforce single OS installation on hardware. Now all of the Comp USA(s), Radio Shacks, Circuit City(s) can sell whatever they want, and since the M$ OS now really costs $120 per machine, and Linux, etc. is by comparison --free... And since M$ tech support now costs more, it becomes cheaper to use other Tech support co's, rather than passing on the cost to M$ (which hid it in the Apps profit, etc.)

Finally, it is a dog to write M$ apps because of the convulted WinAPI. Force the API into the open, and now a company can conceivably develop a code base which can be compiled to be runnable on a larger variety of OS's. For example, if I have 10 WinAPI programmers, and the OpenAPI allows me to use reduce the need to 6, now I can have the other 4 work on porting/debugging the code for other platforms such as Linux, *BSD, BeOS, Mac, etc. So my company's gawsh-this-is-kewl-app runs on a wider variety of platforms. Soon the 90% figure starts to decline, right?

"I'm not getting up my hopes that this will seriously threaten MS's dominant position on the global market." While I admit that it will take longer for the English speaking market to change, separating MS into the companies forces each of them to develop all of their products independently for all of the different languages, and still maintain profit. So I see a cut in M$ support for non-English and non-EU countries. So the worldwide market for Linux, etc. improves, which strengthens Linux, etc. here in the US.

Bill Gates is the largest shareholder. If someone else owned more MSFT stock than him, then they'ed be the world's richest person... I believe he owns around 20 or 22% of it. You can probably find for sure in an SEC filing.

Um.... that basically punishes the entire computing industry for what Microsoft did. Believe it or not, most costomers DO ask for windows. Why should a manufacturer have to spend the time and resources to train staff to install and support an additional OS, in their customers aren't asking for it?

If their customers are asking, and the company is refusing, then they'll lose their customers.

Mainly what should happen is that Microsoft shouldn't be allowed to sign exclusionary deals, give different discounts to different vendors who purchase the same quantity, or join any "market development agreements". That way, if an OEM saw enough requests for BeOS to justify it, they could do so without fear of reprisal.

Requiring manufacturers to create two sets of drivers for devices will simply slow the market down to a crawl. If i use windows, why should i have to wait for an extra 6 months for something, just because the company needs to develop a FreeDOS version of XYZ? And what if the rest of the OS doesn't support the functionality needed..?

As far as I know, OpenBSD doesn't support Quicktime, so should a maker of video capture cards need to reimplement quicktime on that platform before it can ship a product for Windows???

Rethink what you've written and see just how much that would negatively affect the entire industry.

"How the hell do you keep these companies from collaborrating secretly?"

Well, in the early going I would expect them to try, but I would not expect it to last very long. Here's why: in order to collaborate, company A has to sign legal papers with company B. This partnership deal says that A will give b access to the OS-API in return for.... (fill in the blank). Or that A will give b (fill in the blank) in return for the nifty new code developed by the Apps group.

Doesn't seem problematic until you try to fill in the blanks.One way or the other, whatever is being given or traded has to maximize profits for both A and B. Why? because if the agreement doesn't do that, any shareholder of even just one share of either company can sue both for collusion against that shareholder's interest in obtaining a profit on their investment in company stock.

Now can you see how the threat of multiple class action lawsuits might keep this kind of collusion from happening?

Pray tell me: what would exist in this scenario to keep the OS guys from talking to the Apps guys like (presumably) they do today? I just don't get it.

Why do you think the OS guys talk to the app guys today? Out of the goodness of their hearts? Because they're buddies?

No: It's because they're part of the same company, and thus, when the company profits because its office-suite product has a monopoly or near-monopoly on the market, the OS guys benefit as well. When the two groups are no longer a part of the same company, the path by which app profits benefit OS people will disappear, or at least be severely restricted, and the OS guys will no longer have a big motivation to conceal information from app people at non-MS companies.

This is either a good thing, or a bad thing, depending how rational your reasons for dislinking are. If you MUST DESTROY EVIL M$ EMPIRE JUST BECAUSE THEY ARE EVIL AND BILL GATES HAS MORE MONEY THAN YOU, hard luck, Micro-Soft will port, and develop all their horrible apps to 'nix. Given their track record, they are likely to dominate things too. On the good side though, Micro-Hard will probably lose out on their market share [People use M$ because they are ignorant, or they appreciate the fact that all their.docs &.xls' will work on any real computer with little difficulty. (Win-boxes...Eek!)] Once Micro-Soft supports 'nix, and 'nix becomes a bit friendlier, we will see a migration from Win to 'nix. But don't forget... there's nothing to stop Micro-Hard from releasing their own 'Bin-ix'

If, on the other hand, you dislike M$ because they rush products, make bad developement decisions, and lower the general standards of the entire industy, this is a good thing. The three new houses would be free of the constraints of inter-dependability, and thus may be able to concentrate on actually getting things right. There would be no need to rush, say, Office 2001 just because Win 2001 is due on release. Thus, added stability should creep into their products. Don't bring up the HP-UX version of IE, by-the-way, IE was developed to be an integral part of the Win OS', of course it's going to port badly. Also, you won't need that Win partition that you play games on once Micro-Soft start developing for 'nix. (I have to confess, KDE's Minesweeper sucks compared to M$'s). And how many times have you tried viewing a site which required a plug-in, that exists for Win/Mac only? Well guess what, people follow by example so if M$ will lead...

Of course, they could just screw things up, in which case, the status qou is maintained.

You'll notice I haven't commented on Micro-Net here. I don't see any negative ramifications from this change. Already Hotmail runs on FreeBSD, Apache is the dominant server, and M$'s security record is a laughing stock. The only innovation I have seen recently from M$ has been the Passport server system for e-commerce. See previous point. So I reckon the Micro-Net crowd will have their work cut out for them if they want to build a strong position. But who knows, maybe they can get their excrement together and produce something decent. Like matter teleportation or something.

At the time of the MFJ, the primary supplier to AT&T & the Bells was the company which came to be Nortel. As Lucent & Nortel are most definatly in comptetition, it appears that the MFJ has increased competition.

Nortel and Lucent certainly have some areas of competition (not a complete overlap, but then, few competitors really are) -- but what makes you think that the MFJ is solely responsible? Nortel could have decided "Hey, we're the biggest supplier to these guys -- why don't we start moonlighting already?!"

Cannot speak for other anti-interventionists, but for me the problem with regulation of (voluntary, contractural, risk-laden) business activity is the presumption that the future has arrived, or is least close enough to know. Who could have known 20 years ago the various travails that AT&T, IBM, Exxon and other mondo-friggin'-huge companies would have faced between then and now? Or that a tiny company of well-positioned nerds making, of all things, something as abstract as software would now be driving the engines of fear, resentment and envy? (Or, if you'd like, read that as "the engines of prudence, caution and better judgement.";) )

This tendency to see the present *as* the future is one of my beefs about any of the specific breakup plans. I think it might be in Microsoft's best interest to split its divisions anyhow, but I hope they don't do so only to appease the gov't bullies. But consider: right now, early 2000, there is lots of software for which it would be difficult to separate the "Internet" component from the "Application" component from the "OS" component. Could the components be separated? Sure, but it could be in any of several ways -- depends where you prefer to separate your abstractions. Presuming that an outside body has the right to micromanage the development and the abstract design of code is... well, to me it doesn't make sense.

Remember, a big complaint agains Microsoft as a "bad-guy competitor" is that Microsoft bundled software that was "good enough" for free or cheap with their OS, thus stifling competition, because that competition would have to compete at an impractically low price level.

So what about Linux? My system has Mandrake 6.1, and various free applications. Should the DOJ, it its infinite wisdom and foresight, break up Linux development for the "harm" it's doing to them market by lowering the cost of good software? (Rhetorical!)

In the case of DOJ vs. Microsoft, who do you think would win if Microsoft chose the winner; therefore, how fair is this trial? Does anyone really believe that the government knows much about business, technology, or economics?

Let's compare Microsoft to the government.

When there is a stable and entrenched monopoly, like a big central government, it can only lose power if there is a revolution.

Microsoft has a monopoly in a rapidly evolving industry where people are free to buy or BUNDLE whatever they want. The worst thing that can happen to us is that we pay a little more for some choices. MS can't actually force anything. MS doesn't have any guns after all. If MS can force anything, it is only through government backing.

Lets compare MS to its competitors.

Given this starting point of instability and limited power, MS could rapidly lose market share if it stops innovating or makes bad decisions. Suppose MS did not change one line of source code. It wouldn't even exist five years from now.

Now you could point out that MS could buy up companies that innovate instead of innovating itself, and we would be using those new technologies instead, but isn't that what most critics want?

MS has always been vulnerable, but its competitors have made so many astoundingly wrong decisions that MS has won by default.

Other companies would have been far more nasty if they were in the position that Microsoft is in, which is one reason they are NOT in the position that MS in. Other companies STILL use the IBM tactic of running only on proprietary hardware, and are grudgingly attempting some backwards compatibility because of competition from MS.

Does anyone really think that the government or MS competitors really care what is in the customers' best interests?

I think that less successful companies are using the government to kill off one of their competitors. I find this far more offensive than anything Microsoft has done.

Pretend that the deed is done. MS is broken up into multiple smaller shops. Each shop deals with a narrower field, such as office suites or o/s development.

So lets say that by forcing the company into smaller shops, it has the intended effect of opening up the undocumented APIs. It would have to because how would each of the shops be able to create new products with secret features when there would be communication barriers between the shops. I'm though that at first, the secrets would be very slow in leaking out, so you could probably count on Word, or whatever, to be dominant in it's market sector for the forseeable future.

Take it a step further. Let's say, for purposes of illustration, that this actually has the intended effect. Suddenly the market is opened again to competitors, and companies such as Corel with their WordPerfect suite start to gain marketshare again. Companies start to make a lot more money when competeting with the children of MS on their old turf.

I'm really curious what this would do to the open source movement. I find a lot of new (and lots of the old) open source supporters have a very anti-MS stance and it seems that a lot of the reasons for open source software is in reply to this inability to compete with a closed source monopoly. But if there was a new way to compete on the Win platform, would a lot of people abandon doing open source stuff?

I can see a lot of people saying with great invective that this would never happen. That open source is the way of the future. But I suspect that once the lucre begins waving in front of peoples' noses, that there is a chance of moving back to our cathedrals.

Just a thought. (Probably been thought before by better people, but I thought that it was approprite).

In a rejected submission for Slashdot, I provided a link to a Q&A period with Judge Jackson (author of the Findings of Fact in this case.) In his responses, the Judge said he did not think breaking up Microsoft was the appropriate legal action to take. He also thought Linux had a bright future 2-3 years hence, but wasn't a true Windows competitor now, at least not for the market at issue.

Unfortunately, I've lost the link. (I think it was linked to by Ars Technica, but their search engine isn't functioning at the moment.)

The answer to this question is really beside the point. The question *has* a well defined answer. That the majority of people w/o a CS background might not understand it - or agree with it - is no different than the fact that gravity worked the way it works even before Newton explained it. Reality simply is.

However, I do see what you're saying. There is a strong benefit to some consumers to a "one stop shop" model. That's obvious; otherwise there'd be no one stop shops .

So we've an interesting problem. Bundling is Bad, and yet Bundling is Good. That different audiences weigh these differently just adds to the fun.

Perhaps it is time for a different model for software distribution. Ideally, we'd have a model which replaced bundling's ease and simplicity, but corrected the problems of economic and technologic inflexibility.

This isn't necessarily a major leap. Software installations are getting easier all the time. I think that some major mistakes have been made in this - for example, I've seen installs on MS fail w/o providing a useful error (I guess errors are considered unfriendly). But we're moving, I think, in the right direction. I'm very happy with SUN's pkgadd and Redhat's RPMs, for example.

Add to this some of the 1970s concepts of UNIX that have been lost to MS, such as library versioning (or perhaps runtime-set library search paths), and it should be "safe" to install something. That is, one shouldn't fear installing product X because it might corrupt a library used by product Y.

Finally, plug in decent bandwidth so that software can be downloaded, and the world can be a much simpler place for users.

SUN workstations some with the ability to boot and self-install over "the network". This is normally considered to be a LAN, but I don't see this limit as necessarily valid as bandwidth increases.

Similarly, machines can come with a "product browser". This permits searching for, buying, and installing, desired packages. This could be flexible enough that a local CD can be used to speed things up.

SYBASE does something of this sort. When you select to install products from a CDROM, the CDROM is scanned to see what products are available. Add in a "search the net" option, and we're close to there.

I don't say that I've beaten this nail down completely. In fact, my proposed (incomplete) solution is really besides my major point: that we need a replacement to the idea of "bundling" that provides the same - or greater - ease with improvements to safety and flexibility.

I'm not saying put the browser in the kernel or anything. I'm just saying put the browser on the CD. KDE integrates a browser. Redhat ships Communicator. I haven't yet used Gnome, but i can't imagine that it wouldn't include one. And everyone in the world will at the very least include Mozilla once it ships, and somewhere out there, someone will try to integrate it with Gnome or KDE in some way shape or form.

Microsoft would quickly be at a major disadvantage if they could not ship a browser with the operating system. The deal would need to be that said browser has the standard uninstall feature that almost every other windows app has. No big deal... you want it, you've got it. You don't want it, hit remove, it's all gone...

This has been said a billion times, but I'm going to repeat it because you seem to have missed it.

It is not illegal to hold a monopoly in a given market. It is illegal to use that monopoly to stifle competition, or to establish or support a monopoly in a different market. The DOJ has no obligation to stop all monopolies, merely to stop all abuses of monopoly power. This MAY mean breaking up the monopoly, or may just mean ensuring that it plays fair.

Microsoft's applications business doesn't want to build apps for competing operating systems, so Linux doesn't get any. That's not to say that most Linux users would want to run MS Office even if it were available, but at least the choice would be there.

There's another angle on this too. If the OS company was forced to open its API specs, the next version of WINE would be able to run the Windows-native Office. Either way, portability would be assured and the OS becomes less and less relevant.

Of course, Microsoft could just do what IBM did after they lost the fight to bundle the software with the mainframes: start charging a lot for the (non-OS) software.--

I think you're correct that it would be worse. Also, nothing would prevent them from just happening to choose to use the standards of the other Baby Bills, especially if they're all owned by the same people.

Be careful what you ask for, you might get it.

Now, restrictions on separate pricings other than those published to the public (e.g. volume discounts), requirements to publish all APIs to all requestors for a reasonable license, and cancellation of NDA requirements for contract specifics unrelated to technical data... these might do some good.

Forget about whether this is a good idea or not (for a minute). But assuming it does happen, where would they draw the line between OS and apps?

Obviously, MS-Office would go to the apps company, and MS-Windows 9X and NT would go to the OS company. But who would get IE? What about Notepad, Wordpad, Paint? (They're currently distributed with the OS, but they are applications.)

Who would/should decide this? What would MS want? What would the DOJ want? What would we want? Why?

all MS has to do is set up an arrangement/contact with the other new companies and boom, they have everything they need again.

Isn't this a big part of what they have done wrong in their current incarnation? Those exclusive license agreements and shadowy NDAs. When they are 3 differents companies they would have to justify to their shareholders why they haven't ported office over the fastest growing business OS, and won't have the "it's a cometitor to another part our business" excuse. The DOJ just has to watch out for the new companies setting up "Favored Business Partner" status, which, I'm pretty sure, is what they do best.

Most of the posts here on/. are regarding the slice and dice justice about to be imposed on micros~1. This is a rare oportinity to define exactly what an operating system is. [hurrah.com] This definition will serve the public good if it's done right, and hurt the public good if it's done wrong.

An OS should be just enough to boot a 'puter and no more. Make everything an application. This will allow other companies to compete in spaces now considered to be 'part of the operating system'(lets face it, windows isn't an OS, it's a UI).

I say, give micros~1 the kernel space and open up the rest._________________________

The point that "monopolies are not illegal" has been raised many times throughout this discussion.

Achieving a monopoly through legal business practices may not be illegal in the US. But simply having a a monopoly, no matter how it was achieved, may stifle innovation, present insurmountable barriers to entry to competitors, and allow companies to charge for their products amounts that are undesirably high.

Regulating these falls outside the purview of the legal system, but it is legitimate business for legislators. Many behaviors that used to be legal were found undesirable and subsequently made illegal or regulated.

If monopolies exist on essential services and infrastructure, no matter how they were achieved, that is sufficient by itself to consider government intervention and/or regulation. And while many people seem to believe that the US has a laissez faire system where anything that's legal goes without government intervention, even the US (like any other democracy) has a long history of regulating essential services and infrastructure. For example, the communications infrastructure, media companies and utilities all fall under ownership restrictions and government regulations, even though they could (and would) otherwise achieve monopolies through legal means.

Maintaining a competitive, open market is one of the key functions of a democratic government that has chosen a free market approach. Government regulations and ownership restrictions are an essential part of that.

Of course, the question before the court is narrower. The court cannot create new government regulations, only enforce existing law. It is in that sense that the court has limited options for enforcement, and it is in that sense that "monopolies are not illegal".

While the court's options are limited, during an out-of-court settlement, everything is on the table, including remedies that the court could not legally require if the case went to trial.

And Microsoft has an interest in considering consenting to such remedies because if the legal system does not provide relief, lawmakers will take up the issue. That is a much bigger gamble for them and a much harder case to negotiate than settling this quietly with some government legal representatives.

Opening the API and file formats is the answer that would seem to make all parties happy.

except the DOJ doesn't want to make people tell secrets. They are trying to stay out of the IP morass that could result. I still think a break-up is a good idea. M$ has already lost a lot of ground because of the trial (and others have gained, AOL, Linux, Sun, no?). A break-up (even if they help each other later) will do more to level the field and we'll have more competition and better software/services.

Logitech has *everything* first, though. Infrared mice? Yeah, they were doing that back in the '80s. Wheel mice? Back in '95 I think. I wouldn't expect less from a company whose sole purpose is creating pointing devices, though...

Some Microsoft divisions do good work. It's the marketting department that screws everybody over, I think--and the business end. Maybe the solution is to force the marketting people to be their own division, and let them set up an agency or something. Then split the rest of the company into OS and non-OS.

Bill's crimes are less tangible than others, but no less damaging. If Bill (and Stevie-Boy and all the others) are not severly censured personally (by means of fines, jail etc) it sends the message that in business, the ends justifies the means. This is not good for capitalism as a whole, which depends on adherance to a common set of rules & customs. e.g. patents, intellectual property, licensing, contracts, etc.

People have served time for similar white collar crimes e.g. insider trading. Are Microsoft's crimes so different ?

Is Bill above the constitution and the law simply because he is rich ? Or because ordinary people do not understand his crimes ?

Your comment about the People's Republic of the USA is somewhat amusing in a knee-jerk kind of way. But I am attempting (apparently unsuccessfully) to make a serious point, in what way are Bill's white collar crimes any different to that of futures trader Nick Leeson for example. Both sought to illegaly manipulate the market. Both were stupid enough to get caught. Save your sympathy for more deserving causes.

There is no division. A filesystem is an application, as are memory management, and process scheduling, they just happen to be general purpose applications.

Well, the big difference though is that these "applications" are necessary to provide a programmatic interface to hardware. For example, a file system is something a user never interacts with.

Maybe this points to a way to cut the Gordian knot. Maybe Microsoft should be be broken up not not into separate OS/application units, but into two classes of units: a single company which develops APIS, ports them to various kinds of hardware, and licenses them; and maybe two companies that do everything else but are prevented from developing any privately owned APIs. The API company would be prohibited from giving any licensee more access to kernel source code or API information than anyone else.

These non-kernel companies would essentially be in the business of creating Windows "distributions". They could create their own applications as tightly integrated with the browser or whatever as they like. A company like IBM could license the API implementations and create their own "windows distro" with their own user shell and utility set. Not only big companys like IBM -- anybody who who holds his or her own license for the Windows API set could create their own competing operating system on it.

<rant> I am amazed at some./ers' tendency to go on absurd power trips without any reference to the actual wrongs being committed. Yes, in an ideal world all software would be GPLed, have perfect documentation, and would have no bugs. But the fact is that writing software takes time and money, writing documentation takes time and money, running a computer store takes time and money, and publishing specification takes time and money.

What you are suggesting, in essence, is that the entire computer industry be forced to change the way it does business because you aren't satisfied with the way it is being done. You seem to have no respect for the rights of companies or the individuals who make them up. If I want to write code that uses a proprietary API, is undocumented, and only runs on one OS, that's my right. If I want to sell said product, that is also my right. For you to come in and tell me that I'm not allowed to write such code, or to force me to do all kinds of extra work for the priviledge of releasing it, is nothing short of naked aggression.

There's a reason that a lot of code is not well documented, and it's not just because coders are evil. Writing good documentation is a lot of work, and a lot of programmers are simply too busy to do it. Imposing this requirement on them would reduce productivity and force them to spend all their time filling out paperwork so they can get government approval to release their software.

I don't even want to think about the enforcement headaches or the massive disruptions this would cause due to people trying to circumvent the law. If such a law were to be passed, I would seriously consider leaving the country. The above suggestion is Orwellian in its implications. It says that you don't have the right to write or sell software unless you did it in a way the government likes.

I am appalled at this poster's lack of understanding of the way law works. He seems not to have considered that his personal open-source wet dream is not necessarily good law, and might hurt the very people it is designed to help.

MS's monopoly isn't based on it's OS. It is based on MS Office. The only way to fix this is to force MS to publish the file format specifcations for all of its Office Productifity Applications. These are the applications which force Companies to stay with MS today. Any company that wan't to switch to a "better" platform MUST have the ability to continue communicating with the rest of the buisness world..ie Word, Excel, PowerPoint, Project. I don't care how good a Linux base Office Suite is. If it can't speak MS file formats, it's dead before it hits the door.

You start with this: DLLs are flawed as well. Gosh, the number of times I've had DLL errors. They're dynamic, unless they stick in memory (and usually do) and take up memory until I reboot. Too bad there's no convenient way to version number DLLs too, otherwise, AppA would realize that AppB already installed MSFOO.DLL and not overwrite it with an older version.

And then, go on to say this: I'm not a coder. I have not looked at MS code. But from a user end, it need some serious work to compete technically with a finely-crafted UNIX.

Which says it all. You know why AppA overwrites AppB's dll? Shoddy installation script authors, that's why. DLLs under Windows have versioning mechanisms up the wazoo (they're just not part of the filename). However, if you don't use them, you'll get problems.

For the record, MS has fixed this with Win2K and the MS Installer, which debuted in Office 2000. If your installer doesn't meet the criteria, you can't get your "made for Windows 2000" sticker.

As for this: In regards to the secret APIs, they're fairly well known too. I know I'd do it. What better way to corner the market? There's nothing illegal about that, AFAIAC.

I'll remind you of your statement: I'm not a coder. I have not looked at MS code.

Tell me one thing that MS coded up that someone from Corel/Wordperfect/Lotus couldn't - that runs under Windows - and I'll show you an incompetent Corel/Wordperfect/Lotus developer.

I still think it would be better to break MS up along the lines of legacy OS and modern OS. In particular, W95/98/Millenium are known to be a real mess, but have the overwhelming advantage of numbers- they deserve a company dedicated to the maintenance of W95/98 users, a company that isn't just trying to switch all the people to a new OS (W2K).

Conversely, W2K deserves its own company. It has virtually zero real marketshare, really severe hardware requirements, but all reports seem to indicate that it is not as bad as w95:)

The apps could either go to both companies, or they could all stay with the W95 company. That would be an interesting move- take all the legacy, historical stuff and concentrate it. Make one company that is still hugely powerful and integrated but by splitting off the newer stuff, define the bigger company as a caretaker entity. Make a littler company with nothing but the newer stuff like W2K- and give that one Gates and Ballmer. Such a plan might ironically appeal to them as much as it annoys them:)

MSApps can still say to Apple, if you don't make IE the default, we won't support Office.

I assume 'won't support office' in this context meaning that the MS-Applications spinoff would stop making new versions of Office that run on Mac, right? That's the beauty, what incentive would a separate company that supports Office application software have to hold a gun to it's customer's head like that, unless the OS and APP companies are in collusion (not that they wouldn't _want_ to but gotta think that kind of thing sends Jobs running and screaming to the Attourney General)? Assuming that IE lands in the MS-OperatingSystem spinoff, what would the app software company care which browser is default?

Another question: If MS is forced to open its API's such that other applications can hook into the OS, does it follow that other OS's can reverse engineer the API such that Microsoft Apps will work seamlessly (eg, WINE using a fully documented API)? That seemed to be implied in another post. The API is open, Apple can build support into the OS so that the windows version of office runs on a Mac? Someone seemed to say this would be possible (not very desirable) to do this with Linux. Just a thought.

The only way to even be a future threat to Microsoft is for thousands of programmers world wide to give their work away for free. And that's assuming Microsoft can't come up with something evil to stop them in their tracks.

You're assuming that the distribution model is like this. micros~1 > end user When it's actually like this. micros~1 > OEM > end user The goal of this entire case is to foster competition, and freeing up the OEMs to be true system designers will do just that. Using just one example, a journaling file system is possible today but with MSs lock on the OS (and need to collect the mstax), system vendors are forced to wait for w2k. This reduces OEMs to being mearly micros~1 distributors with no control over there own product.

As new capabilities are developed in the future, the true control over what an OS does should be placed in the hands of the people selling the box. Just look at VALinux and the competitive advantage they have over a typical winbox. They can implement faster, respond to customers needs, and adapt to the ever changing market because they control the OS. It's OEMs that should be given the power to innovate. Interestingly, this will have the convienient effect of OEMs asking/demanding compatibility/openess/documented APIs, ect.. because the market will be decided by the OEMs, not MS.

So in the end, the OS can be defined as kernel space, the OEMs can shop for the rest, and end users get to choose which best fits there needs. The end user still gets a box that "just works" and also will benefit from a fast moving marketplace.

Will a lot of vendors still buy everything from MS? Yes. Will users still be able to buy a MS only box? Yes. However, over time, as OEMs mature and develop the expertise and expierience to impliment the changes they want, the market will be opened up, giving the OEMs freedom to innovate. _________________________

As an aside, I'm not buying the story that Netscape lost to Internet Explorer based on product quality. Internet Explorer won because the consumer usually had no choice but to have it. (Can somebody explain to me why I was required to install Internet Explorer before installing Visual C++?)

I don't know, but I don't see as it matters. After all, there are *lots* of programs that come as part of the OS, and if Microsoft shouldn't have included IE, what else are they not allowed to include. For purists modern OS's are not OS's at all but merely massive bundles of API's and utilities. But if you stripped Win95 down to its kernal, you wouldn't have much left.

So sure, the consumer was "forced" to install IE, just like they were "forced" to install Windows Explorer, Notepad, the Start menu, and dozens of other OS components. If we're going to tell Microsoft which products are allowed to be bundled with their OS, why stop with IE? Why not boot minesweeper, telnet, and probably dozens of other crappy add-ons?

There's a big difference between giving something away for free and being predatory.

Actually, my impression is that giving a product away for free to undermine a competitor is the definition of being predatory. Which is why it's such a silly concept: all companies do it, there's nothing unethical about it.

Microsoft can easily pay several hundred people full-time salaries to develop Internet Explorer because that's pocket change to their existing monopoly. Netscape can only do this until they run out of money, which isn't very long given the above situation. In the end, the quality of Netscape's product fell behind as a result. But product quality is not why Netscape lost; poor product quality was the result of their losing.

So now it's a crime to spend more money on a product than one's competitors? Sure it's "unfair" that Microsoft has more money than Netscape. But that's life. It's downright bizarre that you would fault Microsoft for outspending its rivals to get a better product. Are you saying that companies should make sure they spend the same amount on its products as the competition?

When you form a business to compete with an industry leader, you'd better have the capital and the determination to stay in business. In fact I think Netscape did that-- they managed to stay ahead of IE through version 3 at least. But today, Netscape is no better than IE, and on the Mac side I'd argue that it's an inferior product. And it's looking like IE 5 will widen that lead. Yes, it sucks for Netscape, but antitrust laws were not designed to protect businesses. They were designed to protect consumers. And the browser wars undoubtedly helped consumers by creating two vastly improved web browsers and forcing both companies to give them away for free.

AT&T break up was done the way you say. The goverment turned one big monopoly into several little ones, that eventually became big again.

A regional breakup of the phone company made sense, because by-in-large their assets are wires, switches, and franchises -- all fixed in a particular spot. Now with local compeitition plans, some can get different phone service, but the facilities (and most of the operation costs) are still owned by the RBOC. You are essentially just paying someone else for the billing service.

Likewise, with MS -- the 'natural' breakup is along operational lines. However, you are correct that it doesn't have to be this way, because MS's property is primarily intellectual and unlike phone facilities can be transfered for little cost. But, that doesn't mean it's the right way to do it.

To recap, If we break up horizontally, then one of the OS/apps can become the dominant one and we will be in trouble again.

Right -- we would be in the exact same situation as we were with MS-DOS versus IBM DOS versus DR-DOS. The minor incompatibilities weren't worth the hassle of switching vendors (ignoring the Win3.1 beta warning about DR-DOS for the moment.)

Windows NT is not the be-all-end-all and neither is MS Office. (If it were, we wouldn't be yacking on a pro-Linux/OSS board.) Let MS-OS and MS-Apps have their little monopolies -- "Microsoft" loses their single vendor status and any theoretical integration benefits. That alone is huge enough to allow competitors in the door. --